What is Quality Management

1. Quality Management

2. Agenda
• Understanding Business Excellence
• Framework of Business Excellence course journey
• Understanding Why is Business Excellence gaining momentum in the recent past
• How does Business Excellence look like

3. Introduction
• BEX is all about continuously creating and improving the management systems and processes of an
organization to enhance quality, performance, stakeholder-value and profits.
Variation
reduction for
customer delight
Waste
elimination
& value-add
Employee
involvement &
right leadership
BEX

4. Business Excellence
Operational
Excellence
Quality
Excellence
People
Excellence
Business Excellence
Framework
P
• 7 QC tool
• 7 M tool
• QFD
• 6 sigma
• 7 wastes
• L M & O S
• VSM
• FFM
• LSW
• EI
• Delivery
• Leadership &
teamwork
• Variation
reduction
• Waste
reduction
• MBQA
• Progress
tracker
Objective Tools
P : Performance – Profit – Growth

5. What is Business Excellence?
A workplace (manufacturing & service) philosophy for ongoing improvements:
• Customer focus,
• Problem-solving and
• Leadership (FED).
It involves creating an ecosystem for:
• Customer engagement,
• Continuous improvement, and
• Involved/empowered employees.

6. Why Business Excellence?
It provides:
• Competitive advantage,
• Eliminated system waste,
• Maximum value for customer,
• Integration to Industry 4.0,
• Profitable growth.
Business excellence delivers:
• Efficient & effective systems,
• Focus on not only fixing problems quickly but also preventing it
• Alignment with new developments and sustainability,
• Employee involvement through People focus.

7. Business Excellence
• A journey and a mindset and not a methodology.
• Relentless pursuit to improve performance & profit.
• No longer productivity, efficiency & standardization.
• It is all about value flow, innovation and customisation.
• In-built robust process in terms of quality.
• First time right and every time.

8. Quality
It is a variable factor with respect to:
1. Customer
2. Time
3. Place
4. Purpose

9. Quality
Totality of characteristics of a product or service which can fulfill
the intended needs (physiological & psychological) of a customer
for a particular price at a particular point of time is known as
Quality.

10. Safety Understand-ability
Portability Testability
Reliability Adaptability
Efficiency Learn-ability
Robustness
Usability
Complexity
Reusability
Dimensions and Determinants of Quality

11. Total Quality Management (TQM)
• Total quality management: managing the entire organization so that
it excels on all dimensions of products and services that are important
to the customer
• Two fundamental operational goals
1. Careful design of the product or service
2. Ensuring that the organization’s systems can consistently produce the design
• Can only be achieved if the entire organization is oriented toward
them
• Hence, the term total quality management
12-11

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Quality Gurus

13. Dr. Walter Shewhart(1891-1967)
• Known for framing the problems of failures in terms
of “assignable causes”and “chance cause” variation.
• Known for the introduction of the SPC –control
charts as a tool for distinguishing between
assignable and chance cause variation.
• Invented control chartswhich are widely used across
industries to monitor processes and to determine
when there are changes in a process.
• Known for the introduction of the continuous
improvement cycle– Plan –Do –Check–Act (PDCA).
13
© 2020 KPMG, an Indian Partners hip and a memberfirmof theKPMGnetwork of independentmemberfirms affiliated with KPMGInternationalCooperative(“KPMGInternational”),a Swis sentity.Allrights reserved.
Quality Gurus

14. Dr. W EdwardDeming(1900-1993)
• Made a significant contribution to Japan’s reputation
for innovative, high quality products and for its
economic power.
• Championed the work of Walter Shewhart including
statistical process control, operational definitions
and “Shewhart Cycle" which had evolved into PDSA
(Plan-Do-Study-Act).
Dr. Joseph M Juran (1904-2008)
• Made a significant contribution to Japan’s reputation
for innovative, high quality products and for its
economic power.
• Known for JuranTrilogy – quality planning, quality
control and quality improvement.
• First to apply the work of Vilfredo Pareto to quality
issues - “vital few and trivialmany”.
14
© 2020 KPMG, an Indian Partners hip and a memberfirmof theKPMGnetwork of independentmemberfirms affiliated with KPMGInternationalCooperative(“KPMGInternational”),a Swis sentity.Allrights reserved.
Quality Gurus

15. Dr. Kaoru Ishikawa(1915-1989)
• Considered as a key figure in the development of quality
initiatives in Japan, particularly the quality circle.
• Best known for the Ishikawa or fishbone or cause and
effect diagram often used in the industrial processes
analysis.
• Translated, integrated and expanded the management
concepts of W. Edwards Deming and Joseph M. Juran
into the Japanesesystem.
Philip B Crosby(1928-2001)
Philip Crosbyis known for his four absolutes of quality
management:
• Quality means conformance to requirements.
• Quality comes from prevention.
• Quality performance standard is zero defects.
• Quality measurementis the price of non-conformance.
15
© 2020 KPMG, an Indian Partners hip and a memberfirmof theKPMGnetwork of independentmemberfirms affiliated with KPMGInternationalCooperative(“KPMGInternational”),a Swis sentity.Allrights reserved.
Quality Gurus

16. The Quality Gurus Compared

17. Service Definitions
• Services are deeds, processes, and performances.
• Valarie Zeithaml & Mary Jo Bitner
• A service is a time-perishable, intangible experience performed
for a customer acting in the role of a co-producer.
• James Fitzsimmons
17

18. Definition of Service Firms
• Service enterprises are organizations that facilitate the
production and distribution of goods, support other firms in
meeting their goals, and add value to our personal lives.
• James Fitzsimmons
18

19. Role of Services in an Economy

20. Transformation Model ( IPO Model )

21. Transformation Model ( Services)

22. Service – Operations Perspective
Characteristics of Services:
• Intangibility : They are not physical items
• Heterogeneity: They are difficult to standardize
• Inseparability: Production and Consumption are simultaneous
• Perishability: They Cannot be stored

23. Service –Customer Perspective
Service Outcomes:
• Products
• Benefits
• Emotions
• Judgements
• Intentions

24. Moments of Truth
• Each customer contact is called a moment of truth.
• You have the ability to either satisfy or dissatisfy them when you contact them.
• A service recovery is satisfying a previously dissatisfied customer and making them
a loyal customer.

25. Defining the Dimensions of Quality
• Quality in Goods
• Performance.
• Features.
• Reliability.
• Durability.
• Conformance.
• Serviceability.
• Aesthetics.
• Perceived quality.
• Quality in Services
• Reliability.
• Tangibles.
• Responsiveness.
• Assurance.
• Empathy.

26. Dimensions of Service Quality (RATER model) 1
• Reliability: Perform promised service dependably and accurately. Example: receive
mail at same time each day.
• Assurance: Ability to convey trust and confidence. Example: being polite and
showing respect for customer.
• Tangibles: Physical facilities and facilitating goods. Example: cleanliness.

27. Dimensions of Service Quality (RATER model) 2
• Empathy: Ability to be approachable. Example: being a good listener.
• Responsiveness: Willingness to help customers promptly. Example: avoid keeping
customers waiting for no apparent reason.

28. Perceived Service Quality

29. Service quality gap model
Customer
Expectation
Management perception of
customer expectation
Service delivery
Service standard
Customer
Perception
Managing the
evidence
Conformance Service Delivery
Understanding
the customer
Gap5
Customer
Satisfaction
Gap 3
Conformance
Gap 2
Design
Gap 1
Market Research
Gap 4
Communication

30. Improving services quality
• SERVQUAL, a survey instrument, measures the service quality gap which is the difference between a customers
expectation of service and the perception of the service that is delivered.
• SERVQUAL model is an empirical model by Zeithaml, Berry and Parasuraman to compare service quality
performance with customer service quality needs.
• Taguchi methods (robust design), Poka yoke (failsafing), quality function deployment (house of quality),
benchmarking, statistical process control – Control chart for variables.
• Process Control charts.

31. Cost of Cost of poor quality poor quality – the
background
Proprietary
content.
©Great
Learning.
All
Rights
Reserved.
Unauthorized
use
or
distribution
prohibited
• ‘Quality is Free’ – P
. Crosby.
• Do you know 20-25% of revenue is possible to be increased by improving Quality?
• Cost of Poor Quality (COPQ) / Cost of Non-conformance (CONC) is a crucial business quality metric.
• It is the costs that would disappear if all failures were removed from a product, service or process and
• is measured either as a percentage of sales or total costs.
• COPQ / CONC can be reduced from 20-25% of a normal company to 5% in a TQM company.
• COPQ > Profit in most companies and it can be halved in about two years.
• Four absolutes of Quality by Crosby:
• Q is conformance to customer requirement.
• Q management is all about defect prevention.
• Q has only one target ‘Zero defect’.
• Measure of Q performance is COPQ.

32. Cost of poor quality – its dimensions
• COPQ has three dimensions.
• Prevention (P) Costs
– All TQ training & planning, process design for control, customer assessment,
and quality improvement costs to prevent defects from occurring.
• Appraisal (A) Costs
– Costs of activities designed to ensure quality or uncover defects.
• Failure (F) costs -
–Costs incurred by defective parts/products or faulty services
–Internal failure costs
• Costs incurred to fix problems that are detected before the
product/service is delivered to the customer.
–External failure costs
• All costs incurred to fix problems that are detected after the
product/service is delivered to the customer
COPQ = P + A + F
In an organization, which of the
three elements is often the highest?
Which should ideally be the highest?

33. Quality cost
trend
Failure
Costs
Field repair costs
Failure found at installation
Failure found at final inspection
Liability costs
Failure found during design phase
Prevention Costs
Time when failure found
What are your takeaways?
$
$
$ 1
10
100
Prevention
Correction
Failure

34. Hidden costs in
COPQ
What do you see?
Reprocessing
Customer returns
Rejects
Warranty expenses
Lost sales
Overtime to correct errors
Extra inventory
Premium freight costs
Extra process capacity
Loss of goodwill
Process downtime
Delays

35. Elements in costs of Product service quality
Failure costs
External failure:
• Loss of future business
• Liability insurance analysis
• Negative word-of-mouth
• Legal judgements
• Interest penalties
Internal failure:
• Scrapped parts
• Rework
Recovery:
• Expedite delivery
• Labor and materials
Appraisal costs
• Peer Review
• Tools/Equipment for
testing.
• Process Control
• Customer Comment
Card Inspection.
• Supervision
Prevention costs
• Training Program
• Supplier Evaluation
• Data Acquisition
and Recruitment &
Selection
• Quality Planning
• Quality Audits

36. Seven Quality Control Tools

37. Agenda
• Background and relevance of seven QC tools.
• Seven QC tools, their features and application.
• Deep dive into the three widely used seven QC tools.

38. The basic tools of quality
• Kaoru Ishikawa used the seven basic visual tools of quality so that the average person could analyze
and interpret data.
• He democratized the 7QC in problem solving process.
• It made statistical analysis less complicated for an average man.
• Good visual aids made statistics and QC more comprehendible.
• These tools have been used worldwide by companies, managers of all levels and employees.

39. Seven quality control tools with broad
applications
Application
focus

40. Seven quality control tools -
Flowchart 1. Flowchart: A schematic flow of product/activities in a process in a defined
sequence.
• Examples: Recruitment process, Bill clearance process, gasoline filling in car etc.
• It analyses the process in a structured manner.
• It helps in the effective visualization of the entire system.
• It facilitates in identifying the source of the quality trouble.
• It guides the lactation of the quality control/focus point.
• The predecessor and successor activity (sequence) are useful in SOP design.
• Facilitates identifying wastes in the system to be eliminated.
• Advanced versions – Brown paper mapping, value stream mapping, four field
mapping, e-value stream mapping in I4.0

41. Seven quality control tools –
Check sheet 2. Check sheet: A document used for organizing, collecting, consolidating and
aggregating large datasets accurately at the location of its generation. It is
designed for quick, easy and efficient recoding of quantitative or qualitative
data.
• Examples: Different check sheets used
• Daily business operational tool used frequently
• It is effective in performing stratification/ categorization.
• It can help in identifying the source of the problem.
Classification check sheet
Defect location check sheet
Frequency check sheet
Check sheet/list

42. Seven quality control tools -
Histogram 3. Histogram: It is a bar graph showing frequency distribution of a data set with
class intervals.
A B C D E
Typical frequency
chart
Normal Bimodal Cliff like
Saw tooth
Skewed
• Examples: Employee annual appraisal rating, defective pieces from a stable process.
• It facilitates in analyzing the distribution of data
• The shape, width and centering leads the manager for improvement.
• It describes the variation in process (process capability).
• It finds applications in understanding patterns for use.

43. Seven Quality Control tools –
Scatter diagram
4. Scatter diagram: It shows the relationship trend between
variables/factors. There can have positive, negative, no and curvilinear
relationships..
Variable
B
Variable A
• Example - Speed of service and quality to customer, Training imparted and
output performance etc.
• Used for correlation analysis.
• Used for confirming instincts on cause-and-effect relationships.

44. Seven quality control tools –
Pareto chart
5. Pareto chart: It is a special histogram arranging categories from highest to
lowest frequency of occurrence. It helps separate the vital few from the trivial
many for focus in problem solving. Often called the 80:20 rules. This universal
concept can be applied to most of the distribution.
• Examples: Inventory management, waste elimination focus, etc,
• Very commonly used by every manager.
• It facilitates in prioritizing the issues for focus.
• It helps separate the vital few from the trivial many for focus in problem solving.
• Often called the 80:20 rules. This universal concept can be applied to most of the
distribution.

45. Seven Quality Control tools – Cause &
effect diagram
6. Cause and effect diagram: It is a picture of lines and symbols designed to
represent a meaningful relationship between an effect and its related causes.
Causes have sub-causes and also sub-sub causes branches. A very concise
representation of causes.
Cause branch
Twig
Twiglet
Effect
• Developed by Ishikawa and also referred as Fishbone or Ishikawa diagram.
• Does it not resemble the WHY-WHY analysis?
It is widely applied for identifying the root cause(s) of a problem.
• Construct a C&E diagram for (a) Increasing pollution in Delhi region, (b) Galloping
traffic jams in metros.

46. Seven quality control tools – Control chart
7. Control chart: This is a statistical chart with control limits of a data sample over
a period of time. It reflects if the process can deliver the key characteristic of a
product / service within the acceptable limits of + 3 sigma.
Upper control limit
X-R, P, C charts and
many more,
Characteristic
Lower control limit
Time
• Examples: Studying any process with critical characteristic in the product or service.
(defects in a shirt, bugs in software etc.).
• The + 3 sigma limits expects a 99.73% (997 ok out of 1000).
• It is used for process capability assessment – Quality sign off.
• Quality clearance of machines/equipment.
• Reducing the non- value added activity of inspection.

47. Summary
Here is a quick recap of what we have learned so far:
• 7 QC tools with their key application.
• Ishikawa’s seven basic quality tools is a foundation for problem solving.
• Learn to use these simple tools for disintegrating your complex problems.
•Process charting  Data collection  Focus on vital few  Insights from distribution patterns  Study
interrelationships  Plot WHY-WHYs  Ensure process capability.
• Tools applied extensively: Flow chart, Pareto Chart, Cause & Effect diagram and Control charts.
• Advanced quality tools for application.

48. Seven Management Tools

49. Agenda
• Background and relevance of seven management tools in the current business world.
• Seven management tools and their features.
• Understanding the application of the tools.

50. Background
• The seven new set of methods were released by JUSE in 1977.
• Known as 7 New QC tools or 7 Management & Planning tools or 7 Management tools.
• Its objective is organising verbal and qualitative data management. It is primarily applied for improving
planning and problem solving in business environment.
• Aims at-
• Eliminating errors / omissions,
• Involving many and evolving new ideas
• Organising verbal data
• Disintegrating complex problems into solvable formats
• Anticipating events for comprehensive planning
• Generating new ideas and encouraging creativity

51. Seven Management tools

52. Affinity Diagram
When to use it?
• When faced with very large set of facts or ideas.
• When problem seem to be complex to grasp.
• When group consensus is necessary.
• During brainstorming or analysing survey data
• While developing themes from ideas.
Higher education admission drivers
1.Campus ecosystem 7. Scholarship 13.Academic accreditation
2.Government/private 8. Alumni feedback 14.Intellectual infrastructure
3.Physical infrastructure 9. Institute location 15.Quality ranking
4.Faculty quality 10.Brand value 16.Industry engagement
5.Program expense 11.International affiliation 17.Dream placement co’s
6 Live projects/SIP 12.Avg. placement salary 18. Residential campus
Admission drivers
What is Affinity diagram?
A process of developing a diagram by reducing or stratifying large set
of disorganised qualitative data into clusters based on affinity /
relationships.
Return on
Investment
Teaching &
learning Industry
engagement
Infrastructure Reputation
2,5,7,12, 17 4,11,13,15
1,3,9,14,18
6, 16
8,10

53. Interrelationship Diagram
What is Interrelationship diagram?
It is a process of creating a
comprehensive relationship digraph of
cause and effect between different
elements of a complex situational
problem for meaningful and useful
insights by using the why-why
methodology.
When to use it?
• Used for deep studies on relationships.
• Used after the application of Affinity
diagram, C&E diagram and tree diagram.
•For understanding links between ideas
or between cause and effect relationships
• Used while identifying relationships
having high impact.
• For analysing the causes of the effect.
Consultancy with
diagnostic head
Testing equipment
availability & Reliability
(3 out & 1 in)
Support Manager
availability
(5 out & 1 in)
Contingency
testing
(2 out & 2 in)
Slot change
management
(3 out & 1 in)
(1 out & 0 in)
Documentation
work center
(1 out & 2 in)
(1 out & 4 in)
Registered
testing slots
Medical diagnostic center
• Increase the availability & effectiveness of Support manager.
• Ensure error free software for registration.
• Focus on the overall test equipment effectiveness.

54. Tree Diagram
What is Tree diagram?
It is a process of developing a series of strategies
/ means to achieve the objective/goal using a
drill-down approach systematically
When to use?
• As a communication tool, to explain details
to others.
• While progressing from broad generalities to
specific details during analysis.
• When trying to find the root cause in a
problem.
• When evaluating implementation issues for
several potential solutions.
• Used after affinity diagram and after inter-
relationship diagram has uncovered key
issues.
Strategies for customer satisfaction
improve after
sales service
Develop
Quality culture
Upgrade
vendor process
Improve PDI
inspection
Responsiveness
Spare availability
Cost effective
Leadership Q
Quality system
Capable process
Selection/Audit
TQM training
Quality systems
Robust SOP
Insp tools
Training
Lean
6 Sigma
COPQ

55. Matrix Diagram
What is a Matrix diagram?
It is a chart developed for indicating
the relationship between two or
more sets of variables on the basis of
attribute / verbal data. It is very
similar to the scatter diagram of 7QC
tools where quantitative There are L,
T, Y, C, X and roof shaped matrices.
When to use it?
• When verbal or qualitative data
is available for relationship study.
• Used in complex situations by
exposing interaction and
dependencies between factors.
• A useful communication tool in
research papers / articles.
Customer
D
Customer
M
Customer
R
Customer
T
Purity % > 99.2 > 99.2 > 99.4 > 99.0
Trace metals
(ppm)
< 5 — < 10 < 25
Water (ppm) < 10 < 5 < 10 —
Viscosity (cp) 20-35 20-30 10-50 15-35
Color < 10 < 10 < 15 < 10
Drum X
L shaped matrix T shaped matrix
X shaped matrix
Roof shaped matrix

56. What is Prioritization matrix?
It is a matrix having factors with
weights and different choices in the
two axes, displaying the scores in
each intersecting cells to finally
facilitate the prioritization.
When to use it?
• When comparative evaluation
is needed.
• When priority on many choices
is to be made using weights.
• It uses the combination of Tree
diagram & Relationship matrix.
Prioritization Matrix
Organization
Factors
ORG1 ORG2 ORG3
W R S
(WxR)
R S
(WxR)
R S
(WxR)
Career
Growth
2 8 16 6 12 7 14
Working
culture
3 6 18 5 15 8 24
Gross Salary 1 9 9 8 8 8 8
Company
Reputation
1 6 6 9 9 7 7
Job security 3 7 21 8 24 7 21
Final score 70 68 74
Priority sequence:
Org 3 Org1  Org2
• Set the priority on job offers from three organizations:
ORG1, ORG2, ORG3.
• W- Weight, R- Rating, S- Score.

57. Process Decision Program Chart
What is Process decision program
chart?
A series of activities of a critical event
sequentially linked with an objective
of sharing events and contingencies
likely to happen when implementation
is on from start to a set of final
outcomes.
When to use it?
•Before implementing a new, large,
complex risky plan having high
uncertainty/unknown elements,
•When plan must be completed under
stretched targets.
•When the price of failure is high.
•Consistent updation with new
events/contingencies is a must.
Commission High precision CNC machines
Analyze
needs
Install
m/c
Train
operator
Conduct
trial
Mass
Produce
Schedule trg.
sessions modules
Conduct
class trg.
On job
trg.
Absent
operator
Shortage of
time
Accident
in m/c
OT Offload Spare
parts
Events
Planned
Steps to
be done
‘What if’
cases
Possible
actions
….
Develop trg. …
.

58. Activity Network Diagram
What is an Activity network diagram?
This is a schematic representation of a
large plan with appropriate sequence
(or parallel) or schedule duration for a
set of dependent tasks (generally
known) and related subtasks.
When is it used?
• Used for complex, long term,
unique and complex projects
having inter dependent activities.
• The diagram enables one to
determine the critical path
(longest sequence of tasks).
• Refer PERT & CPM diagrams
under Project Management
domain.
Activity Description Preceding
activity
Activity duration
days
A Define requirements None 10
B Assign Teams A 5
C Design hardware A 25
D Code software B 20
E Build and test hardware C 50
F Develop Patent request C 15
G Test Software D 35
H Integrate systems E, F, G 15
A
B
C
D
E
F
G
H
Network diagram
Network data table

59. Management tools usage flow
Affinity Diagram
(What?)
Interrelationship
diagram (Why?)
Tree diagram
(How?)
Prioritization
matrix (Which?)
Matrix diagram
(Which?)
Process decision program
chart (conditional?)
Activity network
diagram (When?)

60. Quality 4.0 , Quality Metrics / KPI’s
• https://asq.org/quality-resources/quality-4-0
• https://bscdesigner.com/quality-kpis.htm